Diego Zaldivar on Rootstock integrating smart contracts into Bitcoin

0:01I'm Ashlyn Addison from event chain for investmentpitch media and FinTech news network and today on blockchain interviews we have Diego Zelda var CEO of our SK labs rootstock Diego I saw you speak at the North American Bitcoin money conference and I'm very interested to learn more on rootstock and what you guys are doing with the side chains in bitcoins so thank you so much for coming

0:25on the show today and it's a pleasure to have you here thank you very much for inviting me my pleasure as well you're very welcome so let's kick this off by getting a little bit of background on our SK labs an overview of how long you guys have been working on the project and what solutions you're trying to provide with your side-chains to Bitcoin yes we have

0:48been working since 2015 we started with the idea of extending between capabilities to to integrate smart contracts into Bitcoin and as we work on it they were vision evolved into a full stack of decentralized infrastructure that will provide the services the basic services that are needed to create a an

1:16inclusive financial ecosystem our main goal is to enable financial inclusion through the use of decentralized networks so that's our goal as our purpose as an organization that's great and I know you know Bitcoin is great in its fundamentals but I guess it doesn't have everything that's needed to create that inclusiveness that you guys are aiming for so how exactly does this

1:43sidechain incorporate you know more usability for people and an easier understanding rather than just transferring Bitcoin to somebody yeah well indeed we try to use Bitcoin as as an inclusion platform first and then we realize what was missing in Bitcoin in order to achieve that goal of providing services to those excluded in our society and one thing we realize is that

2:09you need a stable asset because people excluded in our society they have a very short term financial horizon so be they can plan maybe a few days ahead so the volatility of Bitcoin is not suitable for for that kind of users and that was one one element we wanted to enable you know the creation of a stable asses tokenizing and other assets and at the same time we didn't want to create a

2:39system that was dependent on third parties because we thought that you know it was very sensitive managing the money of the poorest people in the world so we needed to have business logic that was running on a decentralized platform this in the same way as Bitcoin runs its transaction processor so that's the other thing that we brought with RSA into the Bitcoin ecosystem there the

3:06business logic execution in a decent rise fashion so the combination of both things are the key to create an inclusive financial ecosystem that's great and I know you know in South America there are a lot of problems with traditional currencies and crypto currencies and these new forms are getting much more popular so looking forward do you anticipate these people

3:35using the rootstock coin just to store the value and transfer is that specifically or is it part of improving Bitcoin itself and and is it for their originally for the people of South America where you were trying to target these solutions well one thing is that we decided not to have our nade a separate currency in the RSK platform so the RSK native currency is a smart

4:01Bitcoin and each marbeth can spend one on one to Bitcoin but the financial system we envision is one where you will have pesos or the local currency of each country issue by a smart contract that will have full collateral in Bitcoin so it's kind of issuing native or local currencies

4:28we backed by bickering going back to the concept of the gold standard in that way you know that each peso issued on the RSK or each dollar issued on the RSK network will have full collateralization pull back in in in the native tree process so we don't see people in the slums or in the poor areas directly using beat them but they will use stable assets and if they manage to have some

4:58savings they might choose to have more long term savings in the form of Bitcoin or or other stable assets but yeah so that's one of the key elements RSK enables to create stable assets enables also to create reputation and information so you can create reputational identities that might be used as collateral to access to basic financial services so it's both things

5:24having stable assets and reputation identities yeah that's great I go that's that's amazing that you guys are doing this and as you mentioned at the beginning you've been developing or you started this in 2015 I'm interested to know you know has this been four years straight of development and when was the major release or at what stage of development are you guys at and I'm sure

5:46you're continuing with that as well yes the the first goal we wanted to achieve was to to have a smart contracts on top of Bitcoin and secured by the Bitcoin network and we achieved that goal in January 2018 a year ago and you know soon after that different projects started deploying there are solutions on top of our SK and indeed there is a project that is going to deploy this

6:14year that is creating stable assets fully collateralized with Bitcoin and other projects that are creating stable assets on top of our SK so so this year will be the year where we'll start seeing like real use cases emerge also we have been working on this lamps of what Osiris and with the International the witness or inter-american Development Bank and the Bitcoin

6:38Argentine NGO to create the FIR version of this inclusive financial ecosystem and we'll see the first release of that system this year though I would say it was mostly two years of full development and now this year was triggering or bootstrapping the ecosystem and also last year something very important started that it was a new project to create an upper layer on top

7:05of our SK that will create offer infrastructure decent rise infrastructure services on top of our SK like that storage dream resolution payment channels different solutions that are needed to scale this technology further and that's project it's called reef Wes and we launched that last year so that's crazy I go sounds like you guys have done a lot already and that

7:32now you're expanding into new horizons so and I like how you mentioned that you're working with some America inter-american you know financial systems and you do have to work with traditional financial systems if you're going to be able to peg these currencies to some fiat currencies so in the traditional financial industry now there's a lot of gouging by some banks

7:56and profit models and business models built into the system now does rootstock have a business model behind it and is it driving revenues to a foundation or how does that work for rootstock well RSK has a business model that is very straight forward we have a revenue sharing with the Bitcoin miners every time become either processes a transaction on our SK they share 20% of

8:26that profit with our escape and those funds are deployed basically are used to continue software development to and to support other key actors on the network like the full nodes and the Federation members that control the movement of value between our SK and Bitcoin and in the case of reef is a different model it's a different model reef has its own

8:54token a brief is to provide these peer-to-peer decentralized infrastructure services not only in RSP but another smart contract enable platforms in the future so it has separate token that can be ported to other platforms and in the current brief is basically you know revenue streams based on offering the centralized infrastructure so it's a

9:23wreath is creating the technology and also joining the network and offering services and profiting from that so that's the way this whole organization will be sustainable in the long term although it's a Purpose Driven organization not a non-profit it's a not-for-profit organization yeah that's great Diego it sounds like you guys have a lot of potential with reef and I'd

9:49like to take a look at you know the roadmap for 2019 is the major focus on reef or are you guys co-developing with RSK and reef and what do you expect to come out with you know in the next six months or throughout 2019 what are the big milestone releases well our division we have been chasing and communicating since 2015 is that what we are building

10:14with this full stack between Bitcoin RSK and reef is what we call the as we name as the internet of value is it's a new internet for the transfer of value so so for us the synergies between all the platforms are our key is I you know each component as a separate company is not as powerful as having all the components interacting together so we see the

10:43development of our ski and reef as a side by side process and one example of that is that in the next six months we will release the first the second module of width there is rift payments there is an off chain payment system much like lining for Bitcoin that is called luminol and lumina will profit from some improvements we will do in our SK there are compression

11:09– calls for luminal LTC P Lumira transaction compression protocol that will enable an efficiency increase of maybe 40 50 percent on the transaction cost or on on chain and 10x the transaction output and cost lowering on the upper layer and the reef layer so that implies that you can process thousands of transactions per second

11:36with repayments Lumino and lower the transaction cost to a fraction of a cent which is key for financial inclusion as well so so we see the development of both as a one unified process and at the end of the year we will have the full stack of weave running on top of our SK and and I think that will be the moment where the people will see the full potential of what we are doing and will

12:04see many use cases that were not possible until today emerge and blossoming in our networks that's great – yeah go I like that you guys are working with it side by side and I completely agree with you that you know especially in the blockchain industry interoperability is key to adoption and and we should all be working together to develop infrastructure that allows more

12:28people to benefit from the advantages of this technology so I'm right in line with what you guys are doing there mmm yes yes we we have that vision that you mentioned that because you know SK we are we have been talking and working on on integrating our SK with litecoin and also some teams of people in cash reach out to to us and other launching protocols that don't have a smart

12:57contracts are working with our SK and as I mentioned the vision of reef is the same is that we are integrating all this peer-to-peer infrastructure services on our SK but ideas in the future it might be integrated in ethereal meals any smart contract a naval platform that is missing dissolution and components can profit from this third layer on top so I

13:20agree with you that the interoperability and creating a mesh a network of networks for the transfer of value creates a system that is more resilient and more valuable for Humanity as a whole and that's our endgame that's what we want to to build and showcase the world or that this is possible at least this has you know immense potential or for Humanity great good for

13:50you guys and you know to touch on that it is harder to develop a system that is interoperable with everything that's already running rather than just making a new system altogether so do you foresee challenges in the development or other challenges as you know you're pushing out this infrastructure for if this year what what challenges do you foresee in the

14:12development and as you guys are moving along yes we definitely the more systems you integrate the the tougher it is because you know each new stem has its complexities you know bit Kony's you TXO is a transaction base that structure if fear you more r SKR account base data structure so so you need to adapt to each platform that's why we try to choose the paths of less resistance no

14:41it's like we we started with big going then light con is pretty easy because it serves the same structure as Bitcoin you know if you ms is sharing a lot of the underlying structure with our sk so that would be the next move and then you know the other systems maybe will take longer but I think once people see the value of these the the other projects will also

15:05be willing to collaborate so this is a joint effort integrating the systems it's a joint effort that not only we think this is only possible if we work as a community it's a community effort yeah I don't think we can do this alone I think we want to put our best effort to to make this as easy as possible for everybody but I think it should be a joint effort I completely agree and it's

15:31it's all about growing the community and having people involved in the project so are you looking for more people to become involved in the project in the development social communities how can people reach out to you guys and join the community if they want to get involved absolutely you know what we are doubling the size of the company of the organization this year so that's one

15:53thing but also what you're mentioning is key we want these we all the platforms we are building we want to be to tend to be community driven platform so so that's something we are encouraging and very likely we will create different incentive programs so people can contribute to the platforms and and participate I think the best way to reach us is by going to our websites to

16:23repo s dot org or to our SK dot Co and there you will see all the connections I mean only commit the contact info and documentation and ways to understand what these platforms do how they interact with each other and how you can collaborate with the building of the technology great yeah go I will leave the descriptions in the description I'll leave the links to you guys communities

16:49so people can join and that's all the time that we have today but I've really appreciate you explaining what's going on with our SK and riff and it sounds like you guys are doing amazing things so I'm looking forward to following up in the coming months when you guys have released some of the infrastructure let's speak again and re you know reiterate and see where our SK is going

17:11and how its flourishing so thank you so much for your time today thank you very much – done and next time we will be displaying some real use cases to take these ideas into action and display the power of these technologies in our society thank you thank you you